Our take...
This deal carries echoes of the agreement between SES Astra and Yahsat announced in April this year, which saw a similar partnership to provide DTH television services in the Middle East and North Africa. Both deals tie together local knowledge and service provision with large-scale infrastructure and resources. In addition to offering satellite services, Echostar's key business is in set-top boxes (STB).

The provision of a television service in Asia will place Echostar in a market far removed from its core competence in the USA, opening up a potential new growth opportunity. Partnership with Asiasat will help to mitigate possible risks associated with this international foray, as well as overcoming local legislation making it difficult for foreign companies to operate independently. In Taiwan, for instance, foreign shareholdings in satellite broadcasting businesses are legally limited to less than 50%.

Entry into a new satellite venture will present the opportunity for Echostar to leverage its STB offering into Asia, especially if HD and PVR services are central to the service. HD and PVR offerings are an underdeveloped opportunity in the region with significant uptake only proven in isolated instances outside of Australia, Japan and Korea.

The new joint-venture will face stiff competition in the well established cable industry - Taiwan has well established cable offerings from MSOs such as China Network Systems, Kbro, Taiwan Broadband Communications and Fu-Yang Media. Throughout the rest of Asia the dense population centres make cable well suited to the conditions.